The 2020 Annual review - A year like no other!
2020 Review
"You know somethin? You're alright, kid" Baloo, The Jungle Book, 1967
By Invested Geordie
Introduction
Well, what a year 2020 was...I feel exhausted, and not just because our youngest woke me up at 3am this morning! I sit here writing in our office which I have used for the vast majority of the year to work from home.
In general, working from home doesn't suit me. I miss the interaction of working alongside great people and bouncing ideas around. Organic conversations, overheard suggestions leading to interesting discussions can't really happen in the same way, working remotely.
I do not think things will return to as they were, for us at least, as 'former' office workers. I suspect 2 or 3 days in the office a week will become the standard, looking ahead. I hope that will give everyone a good work-life balance.
This year has aged everyone, I'm sure. But after being unusually restrained in my alcohol consumption last night, I feel great! Sorry to all those suffering today :)
What went well?
Well, quite a lot, really! I am significantly fitter than I have been in a long time. I have continued both running and cycling, and I managed to get my hands on a reconditioned Wahoo Kickr Core smart trainer. I'm off for a bike fit next week, and following that, will be ordering a new bike through the cycle to work scheme. Something to look forward to!
From an investment perspective, three 'baggers' to focus on:
1. Best of the Best (#BOTB)
A founder led, wholly online business, running twice weekly spot-the-ball style competitions. Currently just over 19% of the portfolio, this is a company I expect to do well in 2021. I look forward to their results, in January, and a conclusion to the formal sale process, in due course. https://www.botb.com/
2. JET 2 (#JET2)
A quality operator, we look forward to returning as customers asap! Mrs IG had the vaccine yesterday, so only me to go. A break in early let August or October half term would be ideal. Everyone needs a break, and going on holiday is something a lot of families are looking forward to - we certainly are. https://www.jet2.com/
3. Lemonade Inc ($LMND)
Is Lemonade Inc making insurance cool? Well, I'm not really qualified to answer that, but their values, purpose & vision really do impress me. Another founder led business making waves. I look forward to seeing what they can achieve in 2021. https://www.lemonade.com/de/en
The IG portfolio ends the year +19.08% YTD.
What didn't go so well?
There were some dark days in March, weren't there? A fascinating period in the markets to live through, though. I doubt many anticipated the furious and unrelenting snap back which took place. In hindsight, doesn't it all look so simple? Buy Zoom, Tesla and Bitcoin and sit back, laughing.....Sadly, I didn't do any of that, and tinkered far too much.
My trading was too frequent, and in many ways I sabotaged my YTD returns by not recognising that, more often than not, the best course of action is to do nothing.
Goals
My monthly drip feed programme continues. I have replaced #IITU with a new vehicle which will be bought in the January drip feed. We continue to overpay our mortgage, and our new fixed rate begins soon. I look forward to eliminating it as soon as it practicable. I'd like to continue to improve my fitness, and dare I say, go on a family holiday abroad this year.
As is now tradition, we'll not be drinking alcohol or eating meat in January. However, I'm keeping everything crossed for Steak Night 2021 at our home in Whitley Bay, but let's see what happens with the vaccine roll out, first.
Q&A
I did ask on Twitter if anyone had any questions for this blog, so here we go:
1. James asked: "I notice you have maintained a high cash waiting for much of this year. In retrospect, do you feel you would rather have deployed on some recovery shares (or similar) or are you happy with your decision based on the sheer unpredictability of events?"
The easy answer is, I wish I had deployed all my cash at the end of March and sat back and watched the money roll in, but it's not as simple as that. The volatility in the market was really scary. My cash weighting also reflects cash outside of my ISA wrapper. Technically, I could bring this into play through non-leveraged spread bets within a week, should I wish, but there would have to be something very dramatic occur for me to consider doing this.
2. Al asked: "Biggest lessons, also what you wish you would have done differently and how did you decide & plan your portfolios cash position during the year"
Biggest lesson this year is that I'm doing too much and it has negatively impacted my returns. I am happy that my ideas and themes are sound, but I have let me emotions drive things too much, this year. See cash element above.
3. James L asked: "I notice a lot of your new holdings are US based, tech mainly, it would be interesting to see the logic and how you keep up to date with the market"
I have worked in software development, almost consistently, since leaving University. The newer holdings, I believe, play ever increasingly important roles in the ways we behave and interact. Twilio is a fascinating example. This is a company I really like, and if I could only hold a single tech company for 2021, Twilio would be it. A communications platform business, it has an enormous addressable market, and a key role to play within the 5G economy. https://www.twilio.com/
YTD Return Spreadsheet
As promised, please find it here. It should be reasonably straightforward - have a play about and see how you get on. I've added some data in there so you can see how adding and removing cash works, and adjusts the YTD % accordingly.
All credit to https://twitter.com/miserlyinvestor I'm happy to answer any questions on Twitter, as I'm sure the big miser is, too!
I wish all readers a peaceful & joyous 2021. Stay safe & happy investing!
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